Major Changes in

CAF 2 Course
From Autumn 2023 to Spring 2025 attempt

Compiled by: Murtaza Quaid, ACA

Changes in CAF 2 Course: From Autumn 2023 to Spring 2025 attempt

In this Part:
Income Tax Laws
 Slab Rate of Tax for Individual and AOPs

 Surcharge [Section (4AB)]

 Capital Gain on Immovable Property

 Taxation of Association of Persons & its Members

Sales Tax Laws

 Time of Supply

Compiled by: Murtaza Quaid, ACA

 Tax Rates

Salaried Individuals [Division I, Part 1 of First Schedule]

 Where the income of an individual chargeable under the head “salary” exceeds 75% of his taxable income,
the rates of tax to be applied shall be as set out in the following table:

Taxable Income Rate of Tax

Where taxable income does not exceed Rs.

0%
600,000

Where taxable income exceeds Rs. 600,000

5% of the amount exceeding Rs. 600,000
but does not exceed Rs. 1,200,000

Where taxable income exceeds Rs. 1,200,000 Rs. 30,000 + 15% of the amount exceeding
but does not exceed Rs. 2,200,000 Rs. 1,200,000

Where taxable income exceeds Rs. 2,200,000 Rs. 180,000 + 25% of the amount exceeding
but does not exceed Rs. 3,200,000 Rs. 2,200,000

Where taxable income exceeds Rs. 3,200,000 Rs. 430,000 + 30% of the amount exceeding
but does not exceed Rs. 4,100,000 Rs. 3,200,000

Rs. 700,000 + 35% of the amount exceeding

Where taxable income exceeds Rs. 4,100,000
Rs. 4,100,000

Compiled by: Murtaza Quaid, ACA

 Tax Rates

Non- Salaried Individuals and AOPs [Division I, Part 1 of First Schedule]

 The rates of tax imposed on income of every individual and AOPs except a salaried individual shall be as set
out in the following table:

Taxable Income Rate of Tax

Where taxable income does not exceed Rs.

0%
600,000

Where taxable income exceeds Rs. 600,000

15% of the amount exceeding Rs. 600,000
but does not exceed Rs. 1,300,000

Where taxable income exceeds Rs. 1,200,000 Rs. 90,000 + 20% of the amount exceeding
but does not exceed Rs. 1,600,000 Rs. 1,200,000

Where taxable income exceeds Rs. 1,600,000 Rs. 170,000 + 30% of the amount exceeding
but does not exceed Rs. 3,200,000 Rs. 1,600,000

Where taxable income exceeds Rs. 3,200,000 Rs. 650,000 + 40% of the amount exceeding
but does not exceed Rs. 5,600,000 Rs. 3,200,000

Rs. 1,610,000 + 45% of the amount exceeding

Where taxable income exceeds Rs. 5,600,000
Rs. 5,600,000

 However, in the case of an AOPs that is a professional firm prohibited from incorporating by any law or the
rules of the body regulating their profession, the 45% rate of tax mentioned against last serial number of
the Table shall be 40%.
Compiled by: Murtaza Quaid, ACA
 Tax Rates
Surcharge [Section (4AB)]

 A surcharge shall be payable by every individual and AOPs at the rate of

10% of the income tax imposed (as per slab rate of tax) where the taxable
income exceeds Rs. 10 million.

Compiled by: Murtaza Quaid, ACA

 Capital Gain on Immovable Property [Section 37(1A)]
 A gain arising on the disposal of immoveable property by a person in a tax year shall be chargeable to tax in
that year under the head capital gains at the following rates:
Rate of Tax on properties acquired
on or before 30 June 2024 Rate of Tax on properties acquired on or
Holding Period
Open Constructed after 1 July 2024
Flats
Plots Property
If HP ≤ 1 year 15% 15% 15% For persons appearing on the Active
Taxpayers’ List (ATL) on date of disposal of
If 1 year < HP < 2 years 12.5% 10% 7.5% property, at the rate of 15%.
For persons not appearing on the ATL on
If 2 years < HP < 3 years 10% 7.5% -
the date of disposal of property,
If 3 years < HP < 4 years 7.5% 5% -  Corporate Tax Rate for Companies; and
 Slab Rate of Tax for Individuals / AOPs
If 4 years < HP < 5 years 5% - -
However, tax rate for individuals and AOPs
If 5 years < HP < 6 years 2.5% - - not appearing on the ATL on the date of
disposal, the tax rate shall not be less than
If HP > 6 years 0% - - 15% of the gain.

Explanation
 Gain on disposal of immovable property shall be treated as a separate block of income.
On the other hand, gain on disposal of other capital assets will be added to the normal
income of the taxpayer and taxable on the basis of the tax rates applicable to such person.
 Immovable property such as land and building are capital asset except when depreciable
asset.
 Capital Gain on Sale of Securities [Section 37A]
 Capital gain arising from disposal of securities (other than a gain that is exempt from
tax), shall be chargeable to tax under the head "Capital Gain“ at following rates:

Rate of Tax on disposal of

Rate of Tax on disposal of
securities acquired between
Holding period securities acquired on or after 1 Jul
1 Jul 2022 & 30 Jun 2024
2024
(both dates inclusive)

 Where holding period < 1 year 15% For persons appearing on the Active
Taxpayers’ List (ATL) on date of
 Where 1 year < holding period < 2 years 12.5% acquisition and disposal of securities, at
the rate of 15%.

 Where 2 years < holding period < 3 years 10% For persons not appearing on the ATL
on the date of acquisition and disposal
of securities,
 Where 3 years < holding period < 4 years 7.5%
 Corporate Tax Rate for Companies;
 Where 4 years < holding period < 5 years 5% and
 Slab Rate of Tax for Individuals / AOPs
 Where 5 years < holding period < 6 years 2.5% However, tax rate for individuals and
AOPs not appearing on the ATL, the tax
 Where holding period > 6 years 0% rate shall not be less than 15%

Future commodity contracts entered into by

5% 5%
the members of PMEX

 The rate of 12.5% tax shall be charged on capital gain arising on disposal where the securities are acquired on or after 1 July
2013 but on or before 30 June 2022; and
 The rate of 0% tax shall be charged on capital gain arising on disposal where the securities are acquired before 1 July 2013.
 Taxation of Association of Persons & its Members

Taxation of share of profit from AOP - Individual as a member of AOP [Section 88]

 If the AOP has paid tax for a tax year, the amount
received by a member of AOP in the capacity as
member out of the income of AOP shall be exempt
from tax. [Section 92]
 Explanation - For removal of doubt it is clarified that if
the income of AOP is exempt and no tax is payable
under ITO-2001 due to this exemption, the share
received in the capacity as member out of the income
of the association shall remain exempt.

 However, in case of an AOP having turnover of Rs. 300 million or above during the tax year or any of the
preceding tax years, the share of a member will not be exempt if financial statements duly audited by a firm
of Chartered Accountants, or a firm of Cost and Management Accountants have not been filed along with
return of income by the AOP.
 If, for a tax year, an individual has taxable income besides exempt share of profit from AOP u/s 92, then the
amount of tax payable on the taxable income of the individual shall be computed in accordance with the
following formula:

Amount of tax that would be assessed to the individual for the year if the amount
exempt from tax u/s 92 (i.e. share of profit from AOP) were chargeable to tax Individual‘s actual taxable
X
income for the year
Taxable income of the individual for the year if the amount exempt
from tax u/s 92 (i.e. share of profit from AOP) were chargeable to tax
Compiled by: Murtaza Quaid, ACA
 Sales Tax Laws
Time of Supply [Section 2(44)]

Situation Time of Supply

 Time at which the goods are delivered or made
available to the recipient of the supply; or
Supply of goods, other than under
 The time when any payment is received by the supplier
hire purchase agreement
in respect of the supply,
whichever is earlier

Supply of goods under a hire

Time at which the agreement is entered into
purchase agreement
Services Time at which the services are rendered or provided

Provided that in respect of any of above situation, where any part

payment is received,
 For the supply in a tax period, it shall be accounted for in the return
for that tax period; and
 In respect of exempt supply, it shall be accounted for in the return
for the tax period during which the exemption is withdrawn from
such supply. Compiled by: Murtaza Quaid, ACA